Bufetico
Jon Jaffe told Lennar’s board last November that he was retiring from the homebuilder where he’d started out as an assistant superintendent in Tampa. He’d been there 42 years, through Hurricane Andrew and the Great Recession, and he was leaving as co-chief executive and president. Lennar said it had no plans to replace him.
In the announcement, Stuart Miller, who’d been running the company with him, said Jaffe’s retirement and its timing reflected Lennar’s need to rework how it’s organized and what it costs to run, so it could build homes more people can afford. Jaffe said much the same about his own exit: with the market the way it was, it let Lennar thin out the leadership at the top.
The houses kept coming. In fiscal 2025, his last full year there, Lennar handed over the keys to about 3 percent more homes than in 2024. Its profit per share, the company’s profit divided by the number of shares, fell 44 percent.
Where the profit went
A good part of the missing profit went to the people buying those houses. The annual report says Lennar gives buyers incentives, mostly price cuts on individual homes and help with the financing, and that they come off the revenue it reports. In 2025 they came to $62,700 a home. The gross margin, the part of each dollar from a house that’s left once the land and the building are paid for, went from 22.3 percent to 17.7.
The people walking into Lennar’s sales offices are the reason it offers those incentives. On a call with analysts on September 17, Lennar’s executives said almost half of those visitors can’t qualify for a home right away, Bloomberg reported. Mortgage rates had climbed all summer, Lennar said.
Those buyers have somewhere else to look now, too. For years, homeowners held on to the cheap mortgages they’d locked in and put off moving. Miller said they’re finally starting to negotiate, above all in Florida and Texas, two of Lennar’s biggest markets. When someone selling their own house cuts the price, he said, “they are competing directly for our customer and we respond.”
Miller laid out the plan in the September release: meet demand at prices people can afford and keep building through the slow market. The way I read the housing cycle, when mortgages get expensive, the number of new homes sold usually falls first, and house prices fall last. Lennar flips that order on purpose. Its annual report says the company adjusts prices to keep starting and selling homes at a steady pace, and it calls its gross margin the shock absorber.
What the price followed
On September 16, with Miller now the only chief executive, Lennar reported the quarter that ended in August. It handed over 3 percent fewer homes than a year earlier and earned $1.19 a share, down from $2.29.
Lennar’s own reports give you a rough share price too: the average it paid when it bought back shares. A year earlier that was $122.97. This time it was $85.49, about 30 percent less, while the profit per share fell by almost half and the houses barely moved. Same direction as the profit, very different size.
Over time, the profit per share is what makes stock prices go up and down. Each share is a sliver of the company, and owning that sliver gives you a claim on its part of the profit. There are three things in a share price: what the business earns, what people expect it to earn next, and how much they’ll pay today for those later earnings, which is where interest rates and mood come in. The news gets into the price through one of them. At Lennar, what the business earned set the direction.
Where this breaks
The buyback figure is an average of what Lennar paid over three months, good enough to show which way the stock went and roughly how far, not much more. It also stops on August 31, before September 16, when Miller said the quarter’s profit came in below expectations and Lennar lowered its target for the year’s deliveries. The release doesn’t say what those expectations were, and I won’t guess. Since the price fell less than the profit, something held it up. People pay for the years after this one too, and no filing shows that part.
Some of the drop in profit has nothing to do with houses, either. Lennar holds stakes in technology companies and counts the listed ones at their market price every quarter, so they swing: a gain a year ago, a loss this time. Take those and a few one-time items out, as the company does, and the drop is smaller, in the same direction. A homebuilder’s profit also rides the housing cycle, which is why dividing the price by one year of profit says little about it, and telling the cycle from a real decline takes more than one year of numbers.
Jaffe’s last September
In September 2025, Jaffe was the one who reported how fast Lennar was building. It was putting up a home in 126 days, its fastest ever, and he gave part of the credit to its talks with the firms it builds with. This September the record was 116 days, and the cost of building a square foot kept coming down, 6 percent in a year. Lennar credits that to keeping the number of homes steady, the number the price didn’t follow.
It also spent more on marketing and selling in the quarter. Some of what went to the buyers came out of the cheaper building. Whatever that didn’t cover came out of the shareholders’ profit.